Riverside Just Became the #1 Performing Market in Southern California—Here's Why it Matters

While coastal California counties grapple with declining sales and softening prices, Riverside is quietly rewriting the narrative of Southern California real estate. The Inland Empire city has emerged as the region's top performing housing market, combining consistent price appreciation, robust sales growth, and unprecedented affordability advantages that are reshaping where—and how—buyers invest in Southern California property.

What makes Riverside's rise particularly significant is the timing. As the California Association of Realtors projects modest statewide growth of just 2 percent in home sales for 2026, Riverside has been consistently outpacing regional averages, delivering double digit sales increases and maintaining price stability that eludes its coastal neighbors. For buyers, sellers, and investors watching market indicators, Riverside represents not just an affordable alternative, but a fundamental shift in Southern California's real estate power dynamics.

The Numbers Behind Riverside's Market Dominance

Riverside's performance isn't speculative—it's quantifiable. According to CoreLogic's most recent housing market data, Riverside County posted an 11 percent year over year increase in home sales volume as of October 2024, significantly outperforming the Southern California regional average. This sales momentum has been consistent throughout 2024 and into 2025, with April 2024 data showing an even stronger 13.6 percent increase in transaction volume compared to the previous year.

Price appreciation tells an equally compelling story. The median home price in Riverside reached $585,000 in October 2024, marking a 5.4 percent year over year increase. By November 2025, that median had climbed to $655,000, representing 4 percent annual growth—a pace that demonstrates sustained demand without the volatility seen in overheated coastal markets. This consistent appreciation pattern stands in stark contrast to markets like San Francisco and Los Angeles, where price growth has stalled or turned negative in recent quarters.

The real story emerges when comparing Riverside to its Southern California counterparts. While Orange County's median price reached $1.15 million and Los Angeles hit $875,000 in the same period, Riverside maintained its position at $585,000—offering buyers nearly 50 percent more affordability than Los Angeles County and a staggering 97 percent cost advantage over Orange County. This affordability gap isn't narrowing; it's becoming Riverside's defining competitive advantage in an increasingly price conscious market.​

Market velocity metrics further validate Riverside's strength. Homes in Riverside sold in a median of just 46 days as of November 2025, demonstrating strong buyer demand and healthy market absorption rates. Active inventory increased by a manageable 11 percent year over year in October 2025, providing buyers with options while avoiding the oversupply conditions that typically depress prices. This balanced inventory dynamic—neither too tight nor too loose—creates ideal conditions for sustained market health.journal.

Why Affordability Drives Performance in Today's Market

The California Association of Realtors forecasts that housing affordability will improve slightly in 2026, with the statewide affordability index rising from 16 percent in 2024 to 18 percent in 2026. Translation: only 18 percent of California households will be able to afford a median priced home next year. In this constrained environment, Riverside's relative affordability becomes not just appealing, but essential for market priced buyers.​

Riverside County offers a median home price approximately 32.5 percent below the Southern California regional median of $775,000. For first time buyers and middle income families priced out of coastal markets, this difference represents the gap between homeownership and perpetual renting. As mortgage rates are projected to average 6 percent in 2026—down from 6.6 percent in 2025 but still elevated by historical standards—every dollar of purchase price savings translates directly to monthly payment relief.

The migration patterns confirm this dynamic. According to regional real estate analyses, approximately 75 percent of Inland Empire buyers are relocating from more expensive areas, primarily Los Angeles and Orange counties. These aren't distressed buyers fleeing coastal markets; they're strategic purchasers seeking more home for their investment without sacrificing proximity to employment centers and urban amenities. Riverside's location within an hour of Los Angeles provides that crucial accessibility while delivering substantially lower cost of entry.

National forecasting organizations have taken notice of this affordability driven performance. Zillow projects that "refuge markets"—affordable metros attracting cost conscious buyers—will post some of 2025's strongest price gains as buyer demand shifts away from overpriced coastal areas. The National Association of Realtors similarly identifies markets with median prices below $650,000 as positioned for outsized growth as inventory gradually improves and rate sensitive buyers reenter the market.

The economic fundamentals supporting Riverside's affordability advantage remain intact. While the region is transitioning from its historical dependence on logistics and warehousing—sectors facing automation pressures—toward high tech manufacturing and innovation, the core economic drivers of population growth and employment diversity continue strengthening. The Riverside San Bernardino Ontario metropolitan statistical area maintains an unemployment rate of 5 percent, slightly above the national average but accompanied by consistent job creation in healthcare, education, and emerging technology sectors.

Population Growth and Demand Fundamentals

Riverside County's population reached 2,485,007 in fiscal year 2025, representing a 0.20 percent increase over the previous year. While this growth rate appears modest on an annual basis, the California Department of Finance projects that Riverside County will experience 6.3 percent population expansion over the next five years—substantially outpacing mature coastal counties where growth has stagnated or reversed.

This demographic trajectory matters because population growth directly correlates with housing demand. As California's fourth most populous county, Riverside benefits from network effects that smaller markets cannot replicate: established infrastructure, diverse employment opportunities, educational institutions like the University of California Riverside, and cultural amenities that attract and retain residents. The combination of space, affordability, and urban proximity creates what real estate economists call "gravitational pull"—the self reinforcing dynamic where growth begets more growth.​

Migration patterns amplify this demand foundation. While Los Angeles County lost nearly 28,500 residents in fiscal year 2025—driven by domestic outmigration and wildfire impacts—and Orange County experienced population decline, Riverside County posted positive net migration. These aren't random movements; they represent systematic reallocation of California's population toward more affordable inland markets with improving quality of life metrics.​

The age demographics of Riverside buyers reveal another demand catalyst. The median age of first time homebuyers nationwide has climbed to 38 years, up three years from 2023, as affordability challenges delay household formation. These delayed buyers—primarily Millennials and older Generation Z members—represent pent up demand that will release gradually as rates decline and inventory expands. Riverside's price point makes it accessible to this cohort in ways that coastal markets simply cannot match at current valuations.​

Household formation trends further support sustained demand. The National Association of Realtors reports that buyers now plan to stay in their homes for a median of 15 years, with 28 percent declaring their purchase a "forever home". This long term ownership mentality reduces churn and creates stable neighborhoods, but it also means that when these buyers do enter the market, they're making deliberate, carefully researched decisions—and increasingly, those decisions favor markets like Riverside that offer space, value, and growth potential.​

Infrastructure and Economic Transformation

Riverside's market performance isn't solely about affordability; it reflects substantial public and private investment in infrastructure that enhances long term property values. The completion of the Riverside Transmission and Reliability Project in 2025 improved electrical grid capacity and reliability, supporting both residential expansion and commercial development. Transportation infrastructure continues expanding, with Metrolink service improvements and ongoing freeway enhancements reducing commute times to Los Angeles and Orange County employment centers.

The economic transformation underway in Riverside County signals a market maturing beyond its logistics roots. While transportation and warehousing employment declined by approximately 8.3 percent between Q1 2022 and Q2 2024—shedding roughly 6,439 jobs as automation reshaped the sector—the region has simultaneously attracted high tech manufacturing and innovation companies. Ohmio, a New Zealand based autonomous vehicle manufacturer, relocated its headquarters to Riverside in 2025, establishing the first U.S. facility to manufacture all electric autonomous shuttles from the ground up.​

This economic diversification matters for real estate investors and homebuyers assessing long term value prospects. Markets dependent on single industries face concentration risk; markets with diverse economic bases demonstrate resilience across business cycles. Riverside's strategic pivot from logistics toward advanced manufacturing, healthcare, and education creates multiple demand drivers for housing across income segments and household types.

Commercial real estate performance provides additional validation of Riverside's economic health. The overall commercial property vacancy rate stands at just 5 percent, with multifamily vacancy at an exceptionally tight 1.9 percent—less than half the 4.2 percent national average. Downtown Riverside generates 58 percent of the city's transient occupancy tax revenues despite representing only 3.4 percent of the population, demonstrating concentrated economic vitality that supports both commercial and residential property values.​

New home construction plans underscore long term confidence in Riverside's market. The Riverside City Council approved construction of 20,000 new homes by 2029, a substantial residential development program designed to meet projected demand from the county's growing population. This planned supply expansion, rather than threatening price stability, signals developer confidence that absorption will keep pace with construction—a bullish indicator for market sustainability.​

The 2026 Market Outlook and Strategic Implications

The California Association of Realtors forecasts that statewide home sales will increase by just 2 percent in 2026, reaching 274,400 units, while median prices rise 3.6 percent to $905,000. These projections describe a market finding its footing after years of volatility, but they mask significant regional variation. Markets like Riverside, which have maintained momentum through the adjustment period, are positioned to outperform these statewide averages as conditions improve.​

Mortgage rate projections provide tailwinds for Riverside's continued outperformance. The California Association of Realtors expects the 30 year fixed mortgage rate to decline from an average of 6.6 percent in 2025 to 6 percent in 2026. Bankrate forecasts rates could dip as low as 5.7 percent at certain points in 2026, potentially reaching below 6 percent for the first time since summer 2022. For rate sensitive buyers who have waited on the sidelines, even modest rate declines dramatically improve affordability calculations—particularly in markets like Riverside where purchase prices remain accessible.

Zillow's forecast for 2026 anticipates 4.26 million existing home sales nationally, a 4.3 percent increase from 2025, driven by improving affordability and releasing pent up demand. The National Association of Realtors projects a 14 percent increase in home sales, though with more conservative price growth expectations. Both scenarios favor markets like Riverside that offer entry points for buyers who have been locked out of ownership during the high rate, low inventory period of 2022 and 2024.

Inventory dynamics present perhaps the most significant near term catalyst for Riverside's market. Active listings increased 11 percent year over year in October 2025, providing buyers with more options while still maintaining a seller friendly months of supply ratio around 4.4 months. This represents what real estate economists call the "Goldilocks zone"—enough inventory to facilitate transactions without creating downward price pressure. As additional inventory comes online through new construction and existing homeowners list properties encouraged by stabilizing prices, transaction velocity should accelerate.

The California Association of Realtors projects housing supply will continue improving in 2026, with active listings up nearly 10 percent as market conditions and the lending environment continue to improve. For Riverside specifically, this inventory expansion—particularly new construction targeting the $500,000 $700,000 price range—should broaden the buyer pool without overwhelming absorption capacity. Markets that maintain balanced inventory conditions while competitors struggle with either severe shortages or sudden oversupply typically demonstrate superior price appreciation and transaction stability.​

What This Means for Different Market Participants

For homebuyers, particularly first time purchasers and families relocating from coastal areas, Riverside represents one of Southern California's last accessible entry points for ownership. With only 18 percent of California households projected to afford median priced homes in 2026, finding markets where purchase prices align with middle income budgets becomes imperative. Riverside delivers that alignment while providing space, newer housing stock, and community amenities that renters in expensive urban cores sacrifice to maintain coastal proximity.​

Strategic timing matters in this environment. As mortgage rates decline through 2026 and inventory expands, competition for well priced properties will intensify. Buyers who enter while rates remain in the low to mid 6 percent range, before broader buyer pools reactivate, can secure advantageous purchase prices and refinance to lower rates as markets normalize. The homes selling in 46 days indicate healthy but not frenzied competition—a window that may narrow as the year progresses.​

For sellers, Riverside's performance metrics validate listing decisions that many coastal sellers cannot confidently make. Price appreciation of 4 5.4 percent annually provides meaningful equity gains for homeowners who purchased in recent years, while strong sales velocity—11 percent year over year volume increases—confirms buyer demand. Sellers benefit from inventory conditions that remain favorable without the extreme scarcity that can deter buyers. This balance enables realistic pricing strategies that attract multiple offers while avoiding the prolonged market times afflicting overpriced coastal listings.

Positioning becomes critical for sellers in 2026. Properties that highlight Riverside's key differentiators—space, newer construction, energy efficiency, proximity to schools and employment—will command premium pricing within the market. Sellers who invested in updates and staging that photograph well for digital marketing platforms can leverage Riverside's competitive days on market metrics to accelerate sales cycles. The market rewards preparation and strategic pricing more than it did during the pandemic frenzy when anything listed sold immediately.

For real estate investors and agents, Riverside's emergence as Southern California's top performer creates opportunities that require both conviction and careful execution. Investors seeking cash flowing rental properties find Riverside's rental market exceptionally tight, with multifamily vacancy at 1.9 percent and consistent rental rate growth. The demographic trends—Millennials forming households, relocations from expensive coastal markets, long term ownership reducing turnover—support sustained rental demand even as supply gradually expands.​

Real estate professionals who establish expertise in Riverside market dynamics, neighborhood specific investment criteria, and the buyer migration patterns from Los Angeles and Orange counties can position themselves as essential guides for the steady stream of relocating buyers. The 75 percent of buyers coming from more expensive areas need trusted advisors who understand both markets—what they're leaving and what they're gaining. Agents who articulate Riverside's value proposition in terms of equity building potential, lifestyle improvements, and strategic market timing will capture disproportionate market share as transaction volumes increase.​

The Broader Implications for Southern California Real Estate

Riverside's ascent to top performing market status represents more than a temporary dislocation caused by affordability pressures. It signals a structural rebalancing of Southern California real estate toward markets that offer sustainable value propositions rather than speculative appreciation based on scarcity and exclusivity alone.

The data clearly demonstrates that affordability has become the dominant variable in market performance. When Zillow identifies "refuge markets" as 2025's strongest performers, when 75 percent of Inland Empire buyers relocate from expensive coastal areas, when first time buyer percentages collapse to historic lows in high priced markets while maintaining relative strength in affordable inland regions—these patterns reveal that purchase price accessibility now trumps traditional prestige markers of coastal location.

This rebalancing creates opportunities for markets like Riverside that have invested in infrastructure, economic diversification, and quality of life amenities to compete for buyers previously locked into coastal market myopia. The University of California Riverside provides educational excellence, downtown revitalization creates cultural vitality, and transportation improvements reduce the penalty once associated with Inland Empire location. As remote and hybrid work arrangements persist—reducing the necessity of daily coastal commutes—Riverside's competitive positioning strengthens further.

The California Association of Realtors projects that economic uncertainty will begin clearing up in the next 12 months as mortgage rates decline consistently through 2026. In this improving environment, markets that maintained strength during the adjustment period—demonstrated consistent appreciation, avoided price volatility, sustained transaction volumes—typically lead the recovery. Riverside's performance through 2024 2025 positions it precisely for this dynamic​

Long term value creation in real estate follows population growth, economic opportunity, and infrastructure investment—fundamentals that Riverside demonstrates more convincingly than many higher priced coastal alternatives. The 6.3 percent five year population growth projection, economic transformation toward high tech manufacturing, and planned residential development of 20,000 homes create a multi year growth runway that discerning investors recognize.

For buyers, sellers, and investors navigating Southern California real estate in 2026, understanding why Riverside became the region's top performing market matters more than simply acknowledging the fact. The combination of affordability, demographic tailwinds, economic transformation, and strategic infrastructure investment that drove Riverside's rise provides a framework for evaluating where opportunity exists not just today, but through the decade ahead. In a region where most markets struggle with structural affordability challenges that suppress transaction volumes and price growth, Riverside offers the increasingly rare combination of accessibility and appreciation—precisely what defines market leadership in the current era of California real estate.